A former hedge-fund administrator will get a break for helping the Securities and Exchange Commission uncover fraud at the fund, an agreement that marks a first for the agency and makes use of a concept pioneered by its current chairman decades ago.

The SEC announced Tuesday that it will forego significant enforcement action against Scott Herckis because he flagged the agency to misconduct that fleeced investors of $1.5 million.

The documents and insight Herckis provided enabled the agency to halt the fraud and freeze the assets of the Connecticut-based fund and its owner, Berton M. Hochfeld, the SEC said.

Never before has the SEC negotiated a so-called “deferred prosecution agreement” with an individual. Such deals are frequently used by the Justice Department. But only recently has the SEC begun doing the same with companies and now an individual.

The SEC allowed these agreements in 2010 under Robert Khuzami, the SEC enforcement chief at the time. Khuzami said then there was “no substitute for the insiders’ view” in helping investigate suspected violations of securities law.

SEC Chairman Mary Jo White has said she entered into the first deferred prosecution agreement in 1994, when she was the U.S. attorney in Manhattan and Khuzami was on her staff. Under that deal, she demanded that Prudential Securities admit wrongdoing — a concept that she has since introduced at the SEC.

“I thought in that particular case, for particular reasons, it was very important to achieve admissions,” White said Tuesday at the annual Securities Industry and Financial Markets Association conference in New York. “When I got to the SEC it was a natural place for my attention to turn.”

In the Tuesday agreement, Herckis owned up to aiding and abetting the unlawful activity at the now-defunct HeppleWhite Fund. But he got credit for telling the agency about the misconduct, which included misappropriating the hedge fund’s money, said Scott W. Friestad, an associate director at the SEC’s enforcement division.

“We’re committed to rewarding proactive cooperation that helps us protect investors, however the most useful cooperators often aren’t innocent bystanders,” Friestad said in a statement. Herckis came forward “without any assurances of leniency,” Friestad added.

The SEC started investigating the hedge fund only after it heard from Herckis, who was the fund’s administrator from December 2010 to September 2012. Herckis resigned, contacted the SEC and told the agency about improper transfers of money out of the hedge fund, according to the government.

For his role in those transfers, Herckis must return about $50,000 in fees he received as the fund’s administrator. That money will be added to the $6 million that the SEC has already collected for the purpose of compensating the defrauded investors.

Under the terms of the agreement, Herckis also can’t serve as a fund administrator or provide services to any hedge fund for five years.

But he won’t be charged with aiding and abetting the fraud committed by the hedge fund and its owner. Those charges may have resulted in fines and additional sanctions.

In an interview, Friestad said deferred prosecution agreements have been “underutilized” by the agency and his staff had been looking for an appropriate opportunity to make use of this tool.

“Once we negotiated with (Herckis’s) attorney, we presented the proposed agreement to the commission to consider,” Friestad said. “The chairman and the rest of the commissioners were very supportive of our doing this under these circumstances.”

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